[sustran] Indonesia cancels 24 toll road projects due to "irregularties"

[SUSTRAN Resource Centre]

JAKARTA, July 23 (AFP) - The Indonesian government has cancelled 24 toll
road projects worth 13.06 trillion rupiah (1.9 billion dollars), many of
them linked to the family of former president Suharto, citing
"irregularities," press reports said Friday.

The projects include a triple-decker venture that would have connected
south and north Jakarta, a central Java island toll road, and two major
inter-island bridge projects, the Jakarta Post quoted Public Works Minister
Rachmadi B. Sumadhidjo as saying.

One of the toll bridges was linked to Suharto's grandson, Ari Sigit, a West
Java province toll road with his son Hutomo "Tommy" Mandala Putra, while
the triple-tier Jakarta project was being developed by a company belonging
to his eldest daughter Siti "Tutut" Hardiyanti Rakmana, the Post said.

Sumadhidjo said another 16 toll road projects, still in the tender process
by state-owned toll road operator P.T. Jasa Marga, had also been cancelled,
and that a final review of several other projects hads yet to be completed.

He did not explain why the projects under tender were cancelled.

But the ministry had found "irregularities" in the other 21 toll road
projects, nine of them related to administrative problems, such as
construction being not in line with standard requirements, he said.

There were indications the contract agreement between PT Jasa Marga and
toll road developers in the remaining 12 projects had caused a burden to PT
Jasa Marga, the minister said, citing seven instances where Jasa Marga had
to cover deficits in operational expenses.

Sumadhidjo also said the Indonesian Bank Restructuring Agency was carrying
out a "due diligence" study on five toll road projects, including the
Pondok Pinang-Kebon Jeruk outer ring road in Jakarta, worth 700 billion
rupiah, and Cikunir-Cilincing-Tanjung Priok ring road, worth 1.04 trln rupiah.

The agency is also conducting due diligence on Palimanan-Cirebon toll road
in West Java worth, 400 billion rupiah, the Bekasi-Cawang-Kampung Melayu
toll road in Jakarta, worth 1.7 trillion rupiah, and Surabaya-Gresik
project in East Java province, worth 265 billion rupiah.

He said that so far, there was no indication of corruption, collusion and
nepotism in the company's remaining 46 toll road projects.

Sumadhidjo also said the ministry had evaluated 2,976 non-toll road
projects, where it identified 583 cases that could result in a loss of 114
billion rupiah to the state.

However, after re-evaluation of the projects, the government found 301
ventures worth 62.2 billion rupiah will not necessarily lead to losses.

"The remaining 282 cases worth 51.8 billion rupiah are in the final
evaluation process," he said.

Since Suharto's resignation in May of last year amid riots and pressure for
reform, Indonesian government ministries and state companies have been
weeding out hundreds of projects awarded through corruption, many of them
without tenders.


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